Rent-A-Center deserves credit for not only improving its business over the years but the underlying financial status, Bugatch said in a note. For example, debt peaked at $1.04 billion at the end of 2014 and has since been lowered to $540 million. Management also indicated it’s likely to finalize a refinancing of its two relatively high coupons (4.75 percent due 2021 and 6.25 percent due 2020).

Bugatch said the Street may be overlooking the rent-to-own retailer’s financial condition, which can support a cash dividend payment as soon as the fourth quarter. By 2022 the company should be able to hit a 30-percent payout ratio although this would still be short of its historical peak of around 50 percent in 2014.

Rent-A-Center should become net-cash positive by the end of 2021 with no visible debt on the balance sheet in the two years to follow, the analyst wrote in the note. In fact, “very few” investors acknowledge this outlook which “gets little, if any,” recognition in the stock’s current share price.

Rent-A-Center Inc. shares were trading at $23.16 per share on Monday afternoon, up $1.79 (+8.38%). Year-to-date, RCII has gained 43.05%, versus a 16.60% rise in the benchmark S&P 500 index during the same period.